Gold prices nursed losses on Wednesday, holding below a 15-month high as the dollar firmed after two Federal Reserve officials talked up U.S. interest rate hikes this year.
Spot gold was little changed at $1,285.19 an ounce by 0033 GMT, after dropping 0.4 percent in the previous session. U.S. gold eased 0.4 percent to $1,287.20, falling for a second straight session after a six-day rally. The United States could see two further interest rate rises this year, Atlanta Fed President Dennis Lockhart said on Tuesday.
San Francisco Fed President John Williams said Tuesday that he would support an interest-rate hike in June as long as he sees continued progress on the economy, inflation and jobs. The dollar index, which measures the greenback’s strength against six major currencies, finished Tuesday’s session up 0.3 percent after hitting a 15-month low earlier in the session, recording its first increase in seven days.
Earlier this week, gold had climbed to $1,303.60, its highest since January 2015, after the dollar slumped against the yen.
Gold prices have gained 21 percent since the start of the year on the outlook that the Fed has slowed its expected pace of rate increases. Bullion is sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion. The recent rally in prices has prompted investors to pour money into gold funds.
Assets of SPDR Gold Trust, the world’s top gold-backed exchange-traded fund, rose to their highest since December 2013 on Monday. Mining company Glencore is considering selling its Vasilkovskoye gold mine in Kazakhstan, sources close to the deal said on Tuesday.